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The Impact Of Strategic Choice On The International-Ization Of The Firm, Timothy Clark, Geoff Mallory

Research Collection Lee Kong Chian School Of Business

Companies either seeking to expand into foreign markets or to alter their existing institutional arrangements have a choice between three forms of foreign market servicing: exporting, foreign licensing and foreign direct investment (FDI)1 (Buckley 1991; Buckley and Casson 1976; Root 1987; Terpstra 1987). The ‘stages theory of internationalisation’ proposes that these options are chosen in a linear sequence in that firms initially export, then establish a sales subsidiary and only when they have built up knowledge and experience do they invest directly.